Not too long ago, compressed natural gas (CNG) was a hot topic for government fleets. With the growing interest in alternative fuels, greening mandates, and perceived benefits over gasoline and diesel, many fleets began to invest in CNG by building fueling infrastructure, training technicians, and, of course, buying and retrofitting vehicles.
But in recent years, CNG has not made headlines the way it used to. Gasoline and diesel prices remained low for a few years and electric vehicle technology has advanced. It has become harder to justify the costly up-front investment in CNG vehicles and fueling infrastructure — which is also a problem for those basing their return-on-investment calculations on higher fuel costs.
Government Fleet spoke to a few fleets that have made the investment to see how this shift away from CNG has affected their plans.
At a Glance
Over the past several years, fewer flets are adopting compressed natural gas due to:
- High investment costs, with return on investment difficult to justify
- Lower gasoline and diesel prices
- New advancements in electric vehicle technology.
Finding a Home in Heavy-Duty
The City of Phoenix has used CNG for decades, beginning with light-duty vehicles in the 1990s. Those vehicles were phased out beginning in 2004 because they were costly and OEMs stopped making them.
In 2010, the city purchased its first CNG solid waste trucks and, since 2012, the fleet has replaced its diesel solid waste trucks with CNG-powered models. CNG now powers 100 of the fleet’s 225 heavy-duty solid waste trucks.
The City and County of Denver has used CNG in its solid waste vehicles for about six years. These trucks consume about 200,000 diesel gallon equivalents (DGEs) per year and have reduced CO2 output by 400,000 lbs.
There are advantages to running CNG over diesel, said Todd Richardson, fleet management director. CNG vehicles act like unleaded gasoline vehicles because there’s no urea and no regens. This makes it ideal in an urban environment.
Making the Investment
But adopting CNG requires a significant investment. Often, that means building up costly fueling infrastructure, training technicians, changing shop organization, and buying new vehicles.
When the City of Tulsa, Okla., Equipment Management Division first started building CNG infrastructure, it planned on using the fuel for its refuse trucks. But before the fueling station was completed, the city decided to outsource its refuse collection. The fleet continued to use CNG in its administration vehicles, and purchased CNG Honda Civics until the model was discontinued in 2015.
CNG is still used in the fleet when available — some user departments purchase their vehicles with bi-fuel packages capable of running on gasoline and CNG. But user departments own their own vehicles; while fleet can issue recommendations, it does not have final say on what vehicles are purchased. Over the past year, CNG usage within the city fleet dropped 30%, from 25,000 gallons to 17,000 gallons.
Even though the fleet’s consumption is lower than it used to be, CNG is thriving in Oklahoma. Robert Fazendine, fuel supervisor with the City of Tulsa, has seen demand grow at the city’s public-access fueling stations as Governor Mary Fallin has pushed for CNG adoption. The city received grant funding for its stations thanks to a statewide effort to build CNG stations every 100 miles along major corridors.
After the city opened its second CNG fueling station in June 2017, purchases from the public grew 49%, from 22,000 gallons in 2016 to 33,000 gallons in 2017.
The City of Columbus, Ohio, has also seen high demand from the public. In 2017, the city’s CNG fueling stations pumped nearly one million gasoline gallon equivalents (GGEs) for its own fleet, as well as for several private sector fleets that fuel at these stations. Currently, the city is preparing to open its fourth CNG station.
Dealing with Limitations
Although fleets that make the investment often see benefits, CNG may not work for everyone. According to Richardson, CNG is best used in fixed-route applications, such as solid waste trucks and transit buses. But there are limitations.
“Anywhere you can have a fixed route and it’s a predictable fixed route where you can come home every night and refuel the units on a slow-fill, it absolutely makes sense to use CNG,” Richardson said. “Where the application gets a little tougher is in things like snow removal where it’s an unpredictable route and you don’t know how long you’re going to be out there.”
Denver owns one CNG fueling station with 64 slow-fill nozzles and two fast-fill nozzles. The fleet operates 43 CNG trash trucks and around 50 diesel units, and is looking for ways to expand its CNG fleet.
The City of Tulsa has seen an increase in revenue at its CNG stations. With its decreased CNG use for its own fleet vehicles, selling to the public is how the city could recoup its infrastructure costs.
“The only way to recoup that is for the demand to stay the same or increase on the public side,” said Brian Franklin, CPFP, administrative manager for the City of Tulsa Asset Management Department.
If public demand continues at the same rate, the city will be able to recoup its infrastructure cost in 10 to 12 years.
Getting Buy In
In Phoenix, fuel savings was a major benefit when diesel cost $3.50 a gallon. The fleet does not see the same savings when diesel prices are low, but there are other benefits. For one, taxpayers largely support the use of CNG. For another, it’s a cleaner burning fuel and now that everything is set up, it doesn’t hurt to use it.
“We’re not seeing a lot of savings from fuel, no. But overall CNG vehicles are not more costly to maintain, there’s good public relations with them, and we have the infrastructure,” Gregg Duckett, Public Works operations manager for the City of Phoenix, said.
Duckett noted that his state of Arizona does not offer the same incentives as states that actively encourage green initiatives.
Kelly Reagan, fleet administrator for the City of Columbus, saw similar limitations. When the fleet was challenged by its City Council to reduce fuel spend, greening the fleet wasn’t even part of the conversation. Reagan made sure to frame his proposal in a way that emphasized financial benefits.
“We are in central Ohio, and there are no mandates for fleet to do this. None. But we did it because it’s the right thing to do and it saves the city money,” Reagan said. “You do need to take a long view, because fuel tomorrow can be $1.90 a gallon and the next day it could be $4 a gallon.”
Since 2011, the fleet has grown to 240 dedicated CNG vehicles. The city continues to replace diesel trucks with CNG, and plans to reach 404 CNG vehicles by 2020. Ten years ago, the city fleet consumed about 3.6 million gallons of petroleum fuel. In 2017, the fleet consumed 2.5 million petroleum gallons and has saved more than $2.6 million in fuel costs, thanks to its adoption of CNG and electric vehicles.
The Rise of Electrification
Low petroleum prices aren’t the only thing affecting CNG’s popularity. The alternative-fuel market is a crowded one, and the popularity of electrified vehicles has continued to grow in recent years, as OEMs introduce new hybrid and electric models.
The City of Tulsa is diversifying its alternative fuel options by exploring technologies such as electrification and renewable diesel.
Richardson noted there is a potential for growth for CNG as more fueling stations become available. But he doesn’t see much of a future for CNG in the long run. He believes that electric will be the next big powertrain and, until then, diesel and unleaded gasoline will continue to rule.
The Future of CNG Is Uncertain
Jeff Clarke, general counsel and director of regulatory affairs for NGVAmerica, agrees that electric vehicle technology may take time to permeate medium- and heavy-duty truck fleets due to range and battery weight concerns.
He pointed to the cost savings of using CNG compared to petroleum, and believes CNG adoption will continue to grow, citing the upcoming funds to become available soon from the Volkswagen settlement.
“We have the strongest lineup of available, extremely clean vehicles that qualify for this funding, so the prospects look good,” Clarke said.
Clarke also pointed to renewable natural gas, which is especially appealing to governments that own landfills and solid waste plants and can directly benefit from the production of the fuel.
Duckett is a little more wary about the future alternative fuel for heavy-duty fleets. Whether that’s electric, or hydrogen, or some other source, he does not believe that technology will be ready any time soon. For now, he’s sticking to CNG and B-20.
“It’s a lot of money and if you’re going to get a return on investment you’ve got to really move that way,” Duckett said. “I think we did the right thing in the long run.”